Windows cannot access the specified device, path, or file. You may not have the appropriate permissions to access the item.

Just trying to load some new software on an SBS 2003 server - it was actually some ISA log reporting software to show who had done what and when with the internet connection at a client site.

I got the error ...
Windows cannot access the specified device, path, or file. You may not have the appropriate permissions to access the item.

I assumed it was a fault with the download or the program, not with Internet Security application launch permissions! Only when I tried to run another program did I realise it was a server issue.

Leo had the fix over on his blog
http://www.leonelson.com/blog/2009/08/25/windows-cannot-access-the-specified-device-path-or-file-you-may-not-have-the-appropriate-permissions-to-access-the-item/

basically you have to go into IE Internet Options > Security > Internet zone
Click teh custom level box and find 'Launching applications and unsafe files' towards teh end of the Miscellaneous section.

Change it from Disabled to Prompt. I think the change may have come in with the install of Internet Explorer 8 on the server.